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Against the backdrop of the fourth edition of the Finance in Common Summit (FiCS) held in Cartagena, Agence Française de Développement (AFD) and Colombia’s National Development Finance Corporation (FDN) signed a credit agreement for 90 million euros to smooth the transition of Colombian cities to low-carbon public transportation.
Colombian cities or their public transportation operators will be able to access funds to finance the purchase of electric buses and their associated charging infrastructure through FDN, the leading financier and provider of loans for sustainable infrastructure projects in Colombia. This is thanks to a credit line that includes an interest rate subsidy from AFD.
In view of the challenges of achieving the financial balance needed to shift to electric mobility, this credit line, through its concessional terms, will make electric bus projects feasible, particularly in medium-sized cities.
The concessional funds will be allocated to projects using the interest rate, provided that:
- The financial terms for purchasing the electric fleet prevent the transaction from breaking even financially.
- The project encourages programs that promote gender equality, such as employing female drivers or implementing specific measures aimed at keeping female customers safe.
- The project is based in a medium-sized city.
“This is another important milestone toward our goal of financing and promoting sustainable mobility projects and improving the quality of life and well-being of Colombians. This credit line will help finance projects that reduce carbon emissions, and its focus on gender equality will promote equity, making a positive impact on society,” said Francisco Lozano, FDN President.
Find out more about the Finance in Common Summit (FiCS)
“We are very proud to expand our partnership with FDN. We have already co-financed the purchase of 650 electric buses in Colombia through our subsidiary Proparco. We hope that this new deal will strengthen our ability to finance the electric mobility sector throughout the country, in Bogotá and other cities. This shows the strength of AFD Group in Colombia, where we support sustainable development investments in both the private and public sectors,” said Remy Rioux, CEO of AFD Group.
This new agreement strengthens the partnership between AFD Group and FDN that promotes sustainable transportation in Colombia. Since 2018, Proparco, a subsidiary of AFD Group, has been working closely with FDN on three transactions for financing transportation systems in Colombia. The purchase of 222 natural gas buses was financed for operator Sotramac in Cartagena, and two electric bus projects were recently approved with operators Electribus (250 buses) and Green Móvil (400 buses) in Bogotá.